Antecedents of New Entrant's Product Scope Strategy: Evidence from the U.S. Hospital Industry

40 Pages Posted: 20 Jan 2014 Last revised: 30 Jan 2014

See all articles by Joon Mahn Lee

Joon Mahn Lee

Purdue University - Krannert School of Management

Yongwook Paik

KAIST College of Business, Korea Advanced Institute of Science and Technology (KAIST)

Date Written: December 3, 2013

Abstract

A firm's product scope strategy within its industry is one of the most fundamental concepts in strategic management and entrepreneurship and is particularly important for new entrants. Although the extant literature has focused on the performance implications of firms' product scope positioning (e.g. focus strategy), we still know little about how firms choose their product scope strategy in the first place. We address this important gap by examining the antecedents of new entrants’ product scope strategies. We argue that a new entrant’s product scope strategy depends on internal firm characteristics, such as pre-entry history (or the lack thereof) and the firm's profit orientation, along with the external market environment. Using the U.S. hospital industry as our empirical setting, we find strong support for our hypotheses.

Keywords: New entrant, product scope strategy, focus, hospital industry, entrepreneurship

Suggested Citation

Lee, Joon Mahn and Paik, Yongwook, Antecedents of New Entrant's Product Scope Strategy: Evidence from the U.S. Hospital Industry (December 3, 2013). Available at SSRN: https://ssrn.com/abstract=2381400 or http://dx.doi.org/10.2139/ssrn.2381400

Joon Mahn Lee

Purdue University - Krannert School of Management ( email )

1310 Krannert Building
West Lafayette, IN 47907-1310
United States

Yongwook Paik (Contact Author)

KAIST College of Business, Korea Advanced Institute of Science and Technology (KAIST) ( email )

85 Hoegiro, Supex Building Room 482
Seoul, 02455
Korea, Republic of (South Korea)

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